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4 Important Loyalty Program Rules You Should Know About

4 Important Loyalty Program Rules You Should Know About

Loyalty programs have grown in popularity as a marketing tactic for companies seeking to retain consumers and improve sales. However, not all of them are made equal, and some loyalty program rules must be followed to guarantee their programs are effective and in compliance with regulations.

In this article, we will discuss four important loyalty program rules that businesses should be aware of to create a successful loyalty program. We’ll also show you the best loyalty program tool that you can use in your store to make it much easier for you. Let’s get started!

Why You Need To Implement Loyalty Program Rules

Implementing loyalty program rules is an excellent approach to thank your customers for their repeat business and, as a result, increase your bottom line. But here’s the catch: in order for your loyalty program to be effective, you must have clear and simple rules in place.

By doing so, you may cultivate a loyal customer base that will return to your business for more.

Loyalty Program Rule Example
Loyalty Program Rule Example (click to zoom)

Loyalty program rules can also help you better understand the customers you serve. You may customize your marketing efforts to their demands and offer a more personalized experience that they will enjoy by tracking their purchase history and preferences.

Finally, clear loyalty program rules can help avoid consumer confusion or dissatisfaction, which can lead to unfavorable reviews or lost business. Likewise, by properly conveying the benefits of your loyalty program, you may encourage customers to engage, collect incentives, and even spread the word about the business to others.

4 Important Loyalty Program Rules

Loyalty programs are a great way to grow your WooCommerce store – or any type of store for that matter – but there are a few key configuration items you need to be aware of when you set up the program that will help you make it a success.

Loyalty programs equals repeat purchases
Loyalty programs make your customers purchase more!

Even if you’re not using Advanced Coupons for your loyalty program (which, if you’re using WooCommerce, I think you should be!) these 4 items should be configurable regardless of what tool you’re using and can greatly affect the effectiveness of your loyalty program as a tool to grow:

  1. How many points does someone earn for their spending?
  2. How many points does it take to redeem one whole unit of currency (eg. $1 or €1 or whatever your currency is)?
  3. What is the threshold to earn points?
  4. What is the threshold to redeem points?

1. How many points someone earns for their spend

The first two settings are perhaps the most important to get correct right from the start of your loyalty program. Perhaps the most important concern to your customers is how many points they will earn for their spending.

Here’s the golden rule with this setting: From the customer’s perspective, you want it to look as awesome as possible.

Let me ask you, if you spent $15 with a store, what looks better?

Loyalty programs reward example
Your customers will appreciate rewards from loyalty programs (click to zoom)

Of course, the second one seems much more substantial as a reward and this is the exact feeling you want to elicit from your customers when you are giving them points in your loyalty program.

If you’re worried about them collecting too many points and getting too much reward, don’t worry, the next one is where we set what the “worth” of a point is.

2. How many points it takes to redeem one whole unit of currency

When it comes to setting up a loyalty program, the ratio you define between the points earned and the dollar value is one of the most critical settings to get right.

This ratio determines the exact “worth” of a single point, which ultimately tells you how much discount the customer is getting for their subsequent orders.

How many points does it take to redeem one whole unit of currency
How many points does it take to redeem one whole unit of currency (click to zoom)

To understand this better, let’s run some numbers in a hypothetical scenario. Say Jimmy the Customer buys a product with an order subtotal of $100. If we set the point-earning ratio at 10 points for every dollar spent, Jimmy would receive 1000 points for his order.

Now, let’s say we set the point-redemption ratio at 200 points to redeem $1.

This means that Jimmy’s 1000 points are effectively worth $5 (1000 points divided by 200 = $5 able to be redeemed). In this scenario, the loyalty program is giving an effective discount of 5% on future orders, which most store owners find reasonable in exchange for incentivizing customers to make more orders.

Loyalty Program Example
Loyalty Program Example (click to zoom)

As a store owner, getting this setting right can give you control over the effective discount power of your customer’s points. It’s essential to strike a balance between incentivizing your customers and retaining control over the situations where points can be earned or used.

In addition to this setting, there are two more critical settings or ways that you can both incentivize your customers and retain control over the program’s benefits. By getting all three of these settings right, you can create a loyalty program that benefits you and your customers and helps your business thrive.

3. What is the threshold to earn points

By adding a points threshold, you’re basically telling your customers, “Hey, if you want to earn some points, you gotta spend a little more.” This can motivate them to add more items to their cart, which could lead to increased sales and revenue for your store.

Plus, customers love feeling like they’re getting a good deal, so they might actually thank you for giving them a reason to spend a little extra. Just make sure the threshold isn’t too high, or else customers might feel discouraged and not even bother trying to earn the points.

4. What is the threshold to redeem points

The second threshold you can set is the minimum points required for customers to be able to redeem their rewards. This means that they can’t just redeem a few points here and there; they need to stack up a certain number of points before they can start claiming discounts.

Set Loyalty Points Thresholds
Set Loyalty Points Thresholds (click to zoom)

The benefit of this is twofold: firstly, it encourages customers to keep shopping with you in order to accumulate enough points to redeem rewards. And secondly, it ensures that customers are spending a certain amount with your store before they start claiming discounts, which can help boost your revenue.

Just be sure to set a reasonable minimum points threshold, otherwise, customers may get frustrated and give up on the program altogether.


Loyalty program rules serve as a road map for you and your customers to travel through your loyalty program. It’s like setting game rules to make sure that everyone knows how to play and what to expect.

In this article, we shared 4 important loyalty program rules you should know about:

  1. How many points does someone earns for their spend
  2. How many points it takes to redeem one whole unit of currency
  3. What is the threshold to earn points
  4. What is the threshold to redeem points
Advanced Coupons Loyalty Program for WooCommerce guarantees repeat purchases from customers
Advanced Coupons Loyalty Program for WooCommerce lets you reward your customers easily!

If you are looking for a reliable loyalty program for your store, our Advanced Coupons Loyalty Program for WooCommerce offers tons of exciting features:

  • a full admin dashboard showing the number of points, how many were redeemed, and what is working.
  • your customers can self-service redeem points for coupons. As an admin, you can set expiry periods.
  • aside from making orders, customers can earn points by leaving reviews, commenting on blog posts, registering as a user/customer, completing their first order, spending over a set amount, being rewarded during a period, and admin adjustment
  • and more!

For concerns, suggestions, and feedback, you may reach out to our support team. We will be happy to assist you anytime!

author avatar
Josh Kohlbach CEO

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